IN THE NEWS: Newhouse School instrumental in expansion of billion dollar economic and entrepreneurial development initiative

Syracuse University’s #1 ranked S.I. Newhouse School of Public Communications featured SourceFunding.org in its latest article, which highlights the platform’s recent surge in growth.

“Newhouse School instrumental in expansion of multibillion-dollar economic development initiative”

NEW YORK, NEW YORK (September 19, 2018) - Multi-billion dollar economic development initiatives launched in 2014 and 2015 at Syracuse University’s S.I. Newhouse School of Public Communications and with the support of the Public Diplomacy Program in 2016 continue to grow and are now supporting the expansion of over 50,000 startups, small businesses, nonprofits, and community development organizations nationwide by matching them with the best sources of funding for their particular circumstances and stage of growth.

The national economic development initiatives, first recognized in 2014 by Huffington Post (“A New Platform for Social Enterprise Startups in the U.S.”), have evolved into a cloud-based financial and database technology venture known as SourceFunding.org thanks to the early support of over 100 Newhouse students and faculty, both the Maxwell School of Citizenship & Public Affairs and Martin J. Whitman School of Management, Le Moyne College’s Madden School of Business, and numerous other university, foundation, and banking partners nationally.

Founded by technology entrepreneur and Newhouse alumnus W. Michael Short, and with a growing leadership team that includes SU grads Sara Brainard and Brian Cronin, SourceFunding.org was featured as a Forbes Editors’ Pick for leveling the playing field for small businesses, highlighted for economic and community impact at the White House, compared with Amazon as a marketplace for business finance on the floor of the New York Stock Exchange, and noted for socially responsible “FinTech Innovation” in the Business & Management Review.

SourceFunding.org is the only online platform providing a software as a service (SaaS) matching entrepreneurs, startups, businesses, nonprofits and community development organizations with the Responsible Finance Network™, which includes all of the 14,323 community banks, credit unions, non-profit lenders and community development financial institutions in the United States.

Using advanced matchmaking algorithms and artificial intelligence, the platform speeds up the business financing search and application process and provides a trusted and transparent alternative to the growing number of predatory online lenders and brokers that are plaguing the nation's businesses with hidden fees, astronomical rates, misleading information, and hindering broader economic growth, job creation, and business development nationally.

“SourceFunding.org makes economics and finance interesting, fun, and understandable as it offers entrepreneurs an array of funding options so they can avoid online predatory lenders,” said Joe Connolly, host of News Radio WCBS 880 Small Business Spotlight. He then described the platform as “a dating service for entrepreneurs looking for funding” and compared it with popular dating application Tinder, which is operated along with Match.com by $12 billion dollar Match Group, Inc.

One of the many entrepreneurs benefiting from the SourceFunding.org matchmaking platform is Ashley Warmington of Brooklyn, NY, founder of award-winning tech company Cozy Oasis and recent graduate of Medgar Evers College School of Business where SourceFunding.org currently operates a field office.

Using the funding secured with the help of SourceFunding.org, Ashley expanded her company and created jobs in her local community. Ashley’s tech company is now the top ranked AirBnB property management company in New York City.

“Searching for financing to grow my company took a lot of time away from my business and each lender handed me a big stack of application forms,” said Ms. Warmington. “SourceFunding.org matched me with the right funding from the most trusted source on the first attempt, which saved significant time and money.”

This challenge of finding the right lender is experienced by nearly all entrepreneurs, small businesses, and nonprofits in the United States - especially in historically underserved communities. On average, businesses spend over 100 hours completing loan applications without ever knowing if they are applying to a lender that actually matches their particular circumstances. As a result, roughly 8,000 business loan applications are declined in the U.S. every single day, which economists describe as a “massive market failure.”

“Entrepreneurs and small businesses face significant barriers in accessing the financing needed to grow and create jobs especially in underserved communities,” said Dr. Jo-Ann Rolle, dean of the School of Business at Medgar Evers College, City University of New York. “This is a reality we contend with on a daily basis while supporting entrepreneurs both on campus and in the community, and our work with SourceFunding.org is designed to streamline that process in order to level the playing field for all entrepreneurs."

To address this challenge, SourceFunding.org is providing platform access to several thousand chambers of commerce, small business development centers (SBDCs), economic development organizations, and community colleges so that they will be able to help entrepreneurs, businesses, and nonprofits identify funding options on an ongoing basis, with immediate results, through a complimentary account provided by SourceFunding.org.

“The Small Business Development Center at Onondaga Community College in Syracuse, New York, was so crucial in helping me launch and grow several ventures, including SourceFunding.org, and I’m thankful for the support provided over the years by the center and its incredible director Joan Powers,” explained W. Michael Short. “Now we are able to return the favor by providing access to our platform to entrepreneurs, businesses, and nonprofits in order to support communities nationwide.”

This motivation, to support communities and hard-working entrepreneurs throughout the country, is what inspired founder W. Michael Short to build SourceFunding.org.

IN THE NEWS: SourceFunding.org Founder W. Michael Short Featured on WCBS 880 Small Business Spotlight with Joe Connolly

NEW YORK CITY (June 5, 2018) - SourceFunding.org founder W. Michael Short was featured by News Radio WCBS 880 Small Business Spotlight in an interview about the platform’s national growth, surpassing first-year projections with over 50,000 businesses, startups, and nonprofits served to date, and a mission to combat predatory online lenders and brokers.

Small Business Spotlight: SourceFunding.org Serves As Matchmaker For Entrepreneurs And Lenders

Via News Radio WCBS 880 New York (June 5, 2018) - SourceFunding.org makes economics and finance interesting, fun, and understandable as it offers entrepreneurs an array of funding options so they can avoid online predatory lenders.

As founder W. Michael Short explained to WCBS 880’s Joe Connolly in this week’s Small Business Spotlight, SourceFunding.org took the framework from a dating app and repurposed it for small business funding. Connolly described the company as “a dating service for entrepreneurs looking for funding.”

Short and his team launched the national platform in order to provide a low-cost alternative to predatory lenders, which Short said “have just been growing and growing across the country in the last few years.”

He said the best lenders to work with across the country are low-cost community banks, which can lend at low rates and have the best interests of businesses in mind in a way that larger banks might not.

“There are about 14,000 of these community banks – the low-cost CDFIs; the credit unions, and what we’re able to do is for the first time, an entrepreneur can use our system. They’re able to log in and create their free profile; get organized; be able to see what information they need to have ready and prepared to be able to competitively pursue financing,” Short said.

The technology that SourceFunding.org has been developing allows it to be a matchmaking service between entrepreneurs and small banks.

“Inherent in this entire situation is a relationship – a relationship between the lender and the small business – and there’s really been a breakdown,” Short said. “And what we’ve been able to do is to integrate this really innovative technology to look at the needs and capacity and interests; the particular details of each business, and to be able to look at the lenders across the country, and to be able to find that match – which would be the great match – and sometimes it’s multiple matches.”

Short shared one example of a contractor who was looking for funding for a project and ended up getting taken advantage of. The contractor was a flooring company that has a multimillion-dollar contract for the flooring in an airport expansion and renovation project.

“She took on this loan from a predatory online lender. She thought to herself: ‘Great, wow, I can get this funding from this online lender. I’ll get the money the next day. It’ll go right into my account. Perfect – what could go wrong?’” he said. “Well what went wrong is that the interest rates are sky high, and it’s something between 60 and 70 percent. She didn’t expect that. The fees just were not transparent at all.”

Short said SourceFunding.org can rectify such a situation by refinancing the high-interest debt – finding lenders so she can get the debt off the books and bring the interest rate down to a reasonable level of more like 9 or 10 percent. And the bank matchmaking service can match entrepreneurs or contractors with banks located anywhere in the country – often in places one might not expect.

“How are you going to know that the small community bank in southern Kansas is, you know, rip-roaring and ready to go to expand; they want to do a project in New York and what have you – you’d never know to go talk to that bank, or that credit union, or what have you – all throughout the country,” Short said.

Short said very intelligent people often fall into toxic relationships with predatory lenders offering high-interest loans – even if they do all their due diligence and study up.

"I mean, you go on Google, you go online, and you’re searching for your loans or what have you. Most of these businesses, they go to one bank, they talk to them, they apply. It takes 33 hours for one application. On average, they go to three. That’s almost 100 hours wasted on this paperwork – and a lot of times, it’s the same paperwork over and over,” he said.

SourceFunding.org streamlines the process – offering a list of matches with details on each one to connect clients to the right lender.

“There’s more manual consulting process. But with the technology, the real long-term goal is to have this completely automated. So in the next week, we’re rolling out some new features whereby all that information that we’re talking about that would be helpful for the business to have, they are now going to be able to get it right within their profile – here are top lenders, here’s the information, here are the forms; auto-populating the forms – boom, ready to go,” he said.

Much of SourceFunding.org’s customer base so far is word-of-mouth, but the company also has a network of university and community college partners, Short said.

The company has multiple charging models to make money.

“One model would be if they’d like the complete service; if they need somebody to be helping them along the way or what have you, that’s 7 percent,” Short said. “Now, 7 percent sounds like a lot. But if you factor that in, an equivalent in interest rate – so say, you know, 60 to 70 percent in terms of this predatory online lender. Say we’re able to connect you with a community bank – it’s 8 percent. Well, an equivalent rate – it raises your rate to like 11 percent. Eleven percent – a lot better.”

But SourceFunding.org is transitioning away from percentage fees, and is moving toward an annual fee. Customers set up a profile for free and enter their information, and once they begin using the service and looking for the right bank among their matches, they pay an annual fee of less than $100, Short said.

SourceFunding.org can afford the low price because it is all about volume.

“There are a lot of small businesses in this country. They are the backbone of this country. Eight thousand small businesses are declined for credit every single day,” Short said. “About 3,000 of those businesses are credit-worthy, meaning they simply apply to the wrong place. They wasted their 100 hours to apply and fill out all these forms, and they’ve taken away from their business and they’re wasting all this time – no. No more.”

Short explained that he licensed the technology of a well-known dating company to create his matchmaking service for entrepreneurs and banks.

“We have an exclusive global license on the baseline technology, with a well-known dating company,” he said. “You know, we might not want to reveal it.” Short said the relationship benefits both SourceFunding.org and the dating company, which earns revenue and tests the use of its technology in different sectors.

The smaller community banks that SourceFunding.org matches up with entrepreneurs in need of funding also benefit tremendously. He noted that the small banks are often nonprofits without a huge marketing budget, while predatory lenders have large marketing budgets and advertise everywhere.

“(The community banks) love us. That’s how we’ve been able to develop this network,” Short said. “They’re not having to pay for this qualified, vetted pipeline of applicants. They love it. They’re high quality. They’re not having to waste time, and what have you, in terms of identifying, and they can do what they do best.”

Short explained that SourceFunding.org itself is not a nonprofit, but a “social enterprise.”

“Social enterprise is simply saying that we’re taking the ethos of philanthropy and the market-based approach of capitalism and merging those, so we’re able to have this market-based approach to solving this huge problem in this country,” he said.